The trade dispute between the EU and the US has a long history of skirmishes dating back to the 1960s. From the chicken war to the beef hormone war, the transatlantic partners have engaged in a series of battles over various industries and products. These conflicts have often resulted in retaliatory tariffs being imposed, causing economic losses on both sides. The recent escalation in tariffs between the EU and the US, including the aluminium and steel tariffs, marks a significant departure from previous trade disputes, with services and tech now entering the fray.
In the chicken war of 1962, the European Economic Community imposed tariffs on American chicken imports, leading to a retaliation by the US on European goods. This resulted in losses for both sides, with neither emerging as a clear victor. Similarly, the banana war, which lasted over 15 years, saw the US imposing tariffs on EU exports in response to the EU’s preferential trade regime for banana exports from ACP countries. The beef hormone war, which began in 1989, also resulted in retaliatory tariffs after the EU banned the import of beef treated with growth hormones.
One of the longest-running trade disputes between the EU and the US has been the Boeing/Airbus battle over state subsidies to the aerospace giants. The WTO authorized both sides to impose tariffs on each other’s goods and services, creating tensions that lasted for years. The first aluminium and steel war began in 2018 when the Trump administration imposed tariffs on imports, leading to countermeasures from the EU. The recent re-imposition of tariffs under the Biden administration signals a return to the ongoing trade tensions between the two allies.
What sets the current trade stand-off apart is the departure from relying on the World Trade Organization (WTO) as an arbiter. Traditionally, disputes between the EU and the US would be resolved through the WTO, but the US’s stymying of appointments to the panel and its use of ‘reciprocal’ tariffs have shifted the dynamics of global trade tensions. However, history has shown that while there may be apparent winners in these trade wars, ultimately, there are no true winners as both sides suffer economic losses. As the EU and US navigate this latest trade dispute, the hope is for a resolution that benefits both parties and does not result in long-term negative consequences for the global economy.
